Question

.1 The marketing department of a large chemical company is reviewing its sales forecasting activities. Over the last three years the sales forecasts have been grossly inaccurate. As a result, a process improvement team has been formed to look at this problem. Give an account of how you would advise that team in this situation and outline a programme of work for them to consider

2 It has been suggested by Deming and Ishikawa that statistical techniques can be used by staff at all levels within an organisation. Comment on this view and explain how such techniques could help: a) Senior managers to assess performance b) Sales staff to demonstrate process capability to customers c) Process teams to achieve quality improvement.

Answer 1

1. It is very important to have accurate sales forecast. However there could be many factors contributing to inaccurate sales forecast. To prevent such situation, one should consider a few of these points:

a) Provide correct inputs to finance executives related to cash flows and capital requirement projections.

b) The team should have a advance knowledge of situation and health of business, be it bad or very bad.

c) Set realistic goals. Past, present and future surveys and interviews should be done accurately.

2. Senior managers could use various techniques to asses performance including Seasonality/cyclicality, Macro variables such as interest rates and exchange rates, data science, etc. sales staff could use order conversion rate, Target customer trends, etc. For process teams, they can use Statistical process control (SPC) is a method of quality control which employs statistical methods to monitor and control a process.